The Hindu Business Line : Rice mills ploughing a growth path

Rice mills in Tiruchi district are coming into their own as they increasingly cater to the open market after decades of closeted existence catering exclusively to the State Government-run public distribution system. Mills are in the process of modernising and expanding, sourcing high quality paddy from the local markets and neighbouring States and broadening their market reach in the domestic and export markets. The transition has been happening over the last two years in the paddy growing area with the removal of restrictions on rice and paddy movement, abolition of stockholding limits and the larger role of the private trade after the Government stopped monopoly purchases, say rice millers.

Free movement

According to Mr G. Sugiram, Vice-President, Tiruchi District Rice Mill Owners Association, the lifting of restrictions under the Essential Commodities Act like paddy movement and stock limits have helped the millers expand their markets. Thanks to greater reach they are expanding capacity and setting up modern equipment to improve quality of output. There are over 140 rice mills in the district with an average capacity of about 30 tonnes a day. A few mills handle about 50 tonnes of paddy. The millers are improving the facilities and adding equipment such as graders, sorters and polishers that improve the quality and finish of the grains.

popular varieties

Farmers in the area were also diversifying into varieties that are popular in the open market rather than targeting the public distribution system. In the last two years the area under `Bapatla' a rice variety that is popular across Tamil Nadu, Karnataka and Andhra Pradesh is on the increase, he says. Millers were also looking at neighbouring States to buy paddy for processing. The rice mills business is in a buoyant phase, according to Mr Sugiram.

However, one concern is the fear that the Centre may impose stock restrictions on the rice millers as apart of its approach to controlling commodity prices. That would be a retrograde step that would set the businesses back by a few years.

The free movement of rice and paddy has only helped to control prices, he said.

TN has an edge

Mr B. Rajantran, Managing Director, High Tech Agro Food Pvt Ltd, who has set up a modern rice mill targeting the export market, says that Tamil Nadu can be a low cost supplier - as compared to Karnataka or Andhra Pradesh - of non-basmati rice to the export market. At Rs 15 a kg for the `Bapatla' variety Tamil Nadu has a competitive edge over the others who sell at a rupee or two more.

His new mill near Tiruchi, which started operations three months back, is running to capacity. His only regret is that he settled for a 3-tonne an hour mill rather than a 5-tonne mill, since he did not want to take a bigger risk. The mill will process about 25,000 tonnes paddy a year. More mills need to change from the traditional sizes and move on. The market is pushing such developments, he said.

The opening up of the market is the driving force for development. Farmers in Karnataka and Andhra Pradesh offer better quality of cleaned and graded paddy. Farmers in Tiruchi who have in recent years been exposed to the open market are learning fast. With the better quality of rice output the mills in Tiruchi now cater to a wider market from Tirunelveli in the South to Chennai. Earlier, Andhra Pradesh and Karnataka ate into these markets. But now the millers here are able to enter those markets, said Mr Rajantran.